Business Process Reengineering

Mike Donovan, a management consultant based in Natick, Mass., answers a number of oft-asked questions concerning business process reengineering practices in manufacturing:

Are downsizing, continuous improvement and reengineering basically the same activity?
Not at all. Downsizing usually involves eliminating people or moving from a mainframe computer platform to something less expensive. Downsizing as a primary first step almost always does not result in permanent and positive changes to business processes. Continuous improvement is concerned with incremental improvement over a long period but, typically, not very radical.

With business process reengineering (BPR), you fundamentally rethink and redesign the business processes necessary to maximize customer satisfaction and profits. BPR is concerned with "what could be." BPR is the only approach that can quickly achieve dramatic and permanent improvements.

Why is BPR so popular now?
There are many reasons why BPR has become such an all-consuming passion among manufacturers. Implementing new state-of-the-art manufacturing technologies is a constant concern for competitive manufacturers. Often, this effort requires reengineering critical business processes.

Also, company managements have a propensity for cost reduction. It's something managers understand and know how to do, and the tendency is to fall back on it quickly. Many companies have focused on cost rather than reengineering business processes for great efficiency and quality. Ultimately, competitive factors will almost always prove that the short-term "solution" is not the best solution.

The overriding reason should be that the basis on which manufacturers compete has fundamentally and permanently changed. The speed at which marketplace leaders design, manufacture and introduce products has startled some companies into awakening and realizing it's a new competitive world. These companies realize that surviving and thriving means more, better, faster, and at a lower cost, while finding ways to add value for customers. That's how companies will become leaders and will win.

How can a company determine which business processes need to be reengineered?
Companies should work backwards from the customer to determine how best to meet the customer's needs. They need to focus on the strategies and tactics that really matter to customer satisfaction. Every company, in order to survive, is going to have to get better and better at delivering quality products to customers, fast. This is how the customer defines value. Anything less indicates a dysfunctional organization.

What are the most common mistakes made when beginning reengineering?
One of the biggest mistakes manufacturers make is over-reliance on information technology solutions. Many are spending huge sums and taking giant leaps of faith without the proper foundation. Organizations must pay attention to all aspects of their operation, including people, products, processes and materials. In many cases, companies simply automate processes that are highly ineffective in the first place. This not only costs a lot of money, but the psychology of it all makes it hard to change once the investment is made.

Another mistake is in assuming that BPR will be a quick and simple fix for manufacturing competitiveness. Competitive success in manufacturing results from doing the right things right. Initially, companies should conduct an assessment and planning step that results in an action plan designed to achieve breakthrough performance improvements in cycle time, quality, cost and customer satisfaction. That is how you win with an operational advantage in the marketplace.

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